International Financial Law Prof Blog

Editor: William Byrnes
Texas A&M University
School of Law

Thursday, July 30, 2020

Direct Investment by Country and Industry, 2019

The U.S. direct investment abroad position, or cumulative level of investment, increased $158.6 billion to $5.96 trillion at the end of 2019 from $5.80 trillion at the end of 2018, according to statistics released by the Bureau of Economic Analysis (BEA). The increase reflected a $95.7 billion increase in the position in Europe, primarily in the United Kingdom and the Netherlands. By industry, manufacturing affiliates accounted for most of the increase.

The foreign direct investment in the United States position increased $331.2 billion to $4.46 trillion at the end of 2019 from $4.13 trillion at the end of 2018. The increase mainly reflected a $157.3 billion increase in the position from Asia and Pacific, primarily Japan. By industry, affiliates in manufacturing, finance and insurance, and wholesale trade accounted for the largest increases.

Chart of Direct Investment Positions, 2018-2019

Continued Impact of the 2017 Tax Cuts and Jobs Act (TCJA) on U.S. Direct Investment Abroad

The TCJA generally eliminated taxes on dividends, or repatriated earnings, to U.S. multinationals from their foreign affiliates. In 2019, dividends decreased $454.5 billion to $396.3 billion from $850.9 billion in 2018, but were still more than twice the average annual dividends from the 10 years prior to the TCJA. By country, more than half of the dividends in 2019 were repatriated from affiliates in three countries: Ireland ($85.8 billion), the Netherlands ($74.3 billion), and Bermuda ($67.9 billion) (table 3). By industry, U.S. multinationals in chemical manufacturing ($99.6 billion) and computers and electronic products manufacturing ($92.5 billion) repatriated nearly half of all dividends in 2019 (table 4).

Chart of U.S. Direct Investment Abroad Dividends by Country of Affiliate: 2017-2019

U.S. direct investment abroad (tables 1 – 6)

U.S. multinational enterprises (MNEs) invest in nearly every country, but their investment in affiliates in five countries accounted for more than half of the total position at the end of 2019. The U.S. direct investment abroad position remained the largest in the Netherlands at $860.5 billion, followed by the United Kingdom ($851.4 billion) and Luxembourg ($766.1 billion). Canada ($402.3 billion) moved up one position from 2018 to be the fourth largest host economy, moving Ireland ($354.9 billion) into fifth.

By industry of the directly-owned foreign affiliate, investment was highly concentrated in holding companies, which accounted for nearly half of the overall position in 2019. Most holding company affiliates, which are owned by U.S. parents from a variety of industries, own other foreign affiliates that operate in a variety of industries. By industry of the U.S. parent, investment by manufacturing MNEs accounted for 51.9 percent of the position, followed by MNEs in finance and insurance (12.8 percent).

U.S. MNEs earned income of $532.7 billion in 2019 on their cumulative investment abroad, a 2.1 percent decrease from 2018.

Foreign direct investment in the United States (tables 7 – 10)

By country of the foreign parent, five countries accounted for more than half of the total position at the end of 2019. Japan moved up one position from 2018 to be the top investing country in 2019 with a position of $619.3 billion, moving the United Kingdom ($505.1 billion) to second. Canada ($495.7 billion) and Netherlands ($487.1 billion) switched places as the third and fourth largest investing countries. Germany ($372.9 billion) remained the fifth largest investing country at the end of 2019.

By country of the ultimate beneficial owner (UBO), the top five countries in terms of position were Japan ($644.7 billion), Canada ($580.8 billion), Germany ($522.0 billion), the United Kingdom ($446.2 billion), and Ireland ($343.5 billion). On the UBO basis, investment from the Netherlands and Luxembourg was much lower than by country of foreign parent, indicating that much of the investment from foreign parents in these countries was ultimately owned by investors in other countries.

Foreign direct investment in the United States was concentrated in the U.S. manufacturing sector, which accounted for 40.1 percent of the position. There was also sizable investment in finance and insurance (12.3 percent) and wholesale trade (10.5 percent).

Foreign MNEs earned income of $208.1 billion in 2019 on their cumulative investment in the United States, a 0.8 percent increase from 2018.

July 30, 2020 in Economics | Permalink | Comments (0)

Wednesday, July 29, 2020

OECD/G20 Inclusive Framework on BEPS: Progress Report July 2019-July 2020

This is the fourth annual progress report of the OECD/G20 Inclusive Framework on BEPS. The report describes the progress made to deliver on the mandate of the OECD/G20 Inclusive Framework, covering the period from July 2019 to July 2020, while also taking stock of the progress made since BEPS implementation began.

The report contains an overview and four sections of substantive content. Part I focuses on inclusivity and support for developing countries. Part II describes the progress made on strengthening coherence. Part III describes the progress made on substance. Part IV describes the progress made with respect to evaluation, transparency and tax certainty. These are followed by two annexes providing information on the membership of the OECD/G20 Inclusive Framework on BEPS (Annex A) and the text of the Statement by the OECD/G20 Inclusive Framework on BEPS on the Two-Pillar Approach to Address the Tax Challenges Arising from the Digitalisation of the Economy as agreed in January 2020 (Annex B).

Download Oecd-g20-inclusive-framework-on-beps-progress-report-july-2019-july-2020

July 29, 2020 in BEPS | Permalink | Comments (0)

Tuesday, July 28, 2020

Georgia commits to implement international standard on automatic exchange of financial information by 2023

On 8 June 2020, the Honourable Ivane Matchavariani, Minister of Finance of Georgia, committed to implement the international standard on automatic exchange of financial account information by 2023. This powerful new tool will not only generate additional taxable revenues for Georgia by allowing it to identify cases of tax evasion but also drive changes in taxpayer behaviour.

The Honourable Ivane Matchavariani stated “As a member of Global Forum, Georgia stays committed to implementing the global standards on tax transparency and exchange of information for tax purposes and wishes to formally express its commitment to implement the Standard for Automatic Exchange of Financial Information in Tax Matters (the AEOI Standard). Our intention is to begin the first exchanges under the AEOI Standard in September 2023.”

The Global Forum welcomes Georgia’s commitment as it joins 112 other jurisdictions which have committed to AEOI.

The Global Forum Secretariat will continue to provide technical assistance support for Georgia as it moves to implement AEOI, including within the AEOI pilot project. The pilot project is a partnership between Georgia, Germany and the Global Forum Secretariat, to support the implementation of AEOI in Georgia.

» Read the 2019 AEOI implementation report

July 28, 2020 in GATCA, OECD | Permalink | Comments (0)

Monday, July 27, 2020

Money Laundering Threat Via Private Investment Funds To Launder Illicit Proceeds, Circumventing Regulatory Tripwires

An FBI leaked document (declassified and available here) reports examples of the Money Laundering Threat Via Private Investment Funds To Launder Illicit Proceeds, Circumventing Regulatory Tripwires

  • As of April 2019, an identified former partner of a major US law firm assisted others in laundering more than $400 million from a fraudulent cryptocurrency investment scheme
    through a series of purported private equity funds holding accounts at financial institutions, including those in the Cayman Islands and the Republic of Ireland, to conceal and disguise the nature, location, source, ownership, and control of the proceeds. The underlying source of funds, the perpetrator of the cryptocurrency scheme, was not disclosed to the bank during the initial due diligence review, according to open-source reporting, and a human source with direct access.
  • As of July 2019, a representative of a New York, New York, and London, United Kingdom-based hedge fund proposed investing in private placement funds and using a series of shell corporations to purchase and sell prohibited items from sanctioned countries to the United States. The proposed hedge fund was to have operated entities registered in Luxembourg and Guernsey to evade regulatory requirements when transacting with sanctioned companies, according to a human source with direct access.
  • As of January 2019, an unidentified Mexican cartel operating in the Los Angeles, California, and Orange County, California, areas recruited and paid individuals to open hedge fund accounts at private banking institutions. The cartel laundered approximately $1 million through the accounts each week and then withdrew the money to purchase gold, according to a human source with direct access whose reporting has not been corroborated.
  • As of August 2017, a New York-based private equity firm received more than $100 million in wire transfers from an identified Russia-based company allegedly
    associated with Russian organized crime, according to a reliable source with excellent access.

July 27, 2020 in AML | Permalink | Comments (0)

Saturday, July 25, 2020

Goldman Sachs Settles for $3.8 Billion for its Role in the $4.5 billion Fraud of the Maylasia Sovereign Wealth Fund, Bank's Criminal Charges Dropped

The deal includes a $2.5 billion cash payout by Goldman and its guarantee to return at least $1.4 billion in proceeds from assets linked to sovereign wealth fund 1Malaysia Development Bhd (1MDB),

See the Reuters article here about the $3.9 billion settlement

See previous indictments of Goldman Sachs former Managing Director Former Managing Director of Goldman Sachs Extradited from Malaysia to United States to Face Charges in Multi-Billion Dollar Money Laundering and Bribery Scheme Relating to the 1MDB Fund

Malaysian Financier Low Taek Jho, Also Known As “Jho Low,” and Former Banker Ng Chong Hwa, Also Known As “Roger Ng,” Indicted for Conspiring to Launder $2.7 Billion Stolen From Malaysian Sovereign Wealth Fund

July 25, 2020 | Permalink | Comments (0)

Friday, July 24, 2020

BEA Announcement: Trade in Services Tables Now Available

Please select a table to display or download all data for tables. You may also view a definition of International Services and geographic area definitions.

Legend: (A) Annual; (MNEs) Multinational Enterprises; (MOFAs) Majority-owned foreign affiliates; (MOUSAs) Majority-owned U.S. affiliates; (UBO) Ultimate beneficial owner; (ICT) Information and Communications Technology

U.S. Trade in Services
Services Supplied Through Affiliates
Characteristics of Firms that Trade Services

July 24, 2020 in Economics | Permalink | Comments (0)

Thursday, July 23, 2020

Two Alleged Criminals – A Hezbollah Associated Narco-Money Launderer and a Computer Hacker - Extradited from Cyprus to the United States

First Cypriot National Extradited from the Republic of Cyprus to the United States Under Extradition Treaty

A Lebanese national wanted in Florida who is alleged to have conspired to engage in, and actually engaged, in the laundering of drug proceeds through the use of the black market peso exchange in support of Hezbollah’s global criminal-support network and a Cypriot national who is wanted in the Northern District of Georgia and the District of Arizona for cyber intrusion and extortion, were both extradited yesterday from the Republic of Cyprus to the United States.

“These successful extraditions demonstrate the commitment of the Department of Justice to support local, state and federal law enforcement agencies throughout the United States and our strong working relationship with dedicated foreign partners who assist in apprehending foreign fugitives wherever they may be hiding,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division.  “Thanks to the efforts of our law enforcement partners in Cyprus, Ghassan Diab and Joshua Polloso Epifaniou will now be held accountable in the United States for their alleged crimes.” 

Ghassan Diab, 37, a citizen of Lebanon, arrived in Miami yesterday after being extradited from the Republic of Cyprus.  Diab is charged in the State of Florida, Circuit Court of the Eleventh Judicial Circuit in and for Miami-Dade County, with two counts of money laundering over $100,000, two counts of conspiracy to launder over $100,000, two counts of unlicensed transmission of currency over $100,000, and two counts of unlawful use of a two-way communications device to further the commission of money laundering, all felonies under Florida law.

Diab was previously identified as an alleged Hezbollah associate and charges were announced by the Miami-Dade State Attorney’s Office in October 2016 as a part of the Drug Enforcement Administration (DEA) Miami Field Division’s “Operation reconquista,” a joint State/Federal partnership to attack money laundering which resulted in the arrest of two co-defendants.  At that time, Ghassan Diab’s specific whereabouts were unknown. 

Diab was provisionally arrested in Cyprus for purposes of extradition on March 9, 2019, at the Larnaca International Airport upon his arrival from Beirut, Lebanon, based on a request from the United States in accordance with the U.S.-Cyprus Extradition Treaty. On September 27, 2019, the court in Cyprus found him extraditable to the United States. 

Joshua Polloso Epifaniou, 21, a resident of Nicosia, Cyprus, arrived at John F. Kennedy Airport in New York yesterday after being extradited from the Republic of Cyprus, where he was arrested in February 2018.  Epifaniou is the first Cypriot national extradited by Cyprus to the United States.  Cyprus amended its Constitution in 2013 to allow for the extradition of Cypriot nationals to a European country or to a third country on the basis of a European arrest warrant or on the basis of a bilateral or multilateral treaty that the Republic of Cyprus has signed, with the understanding that the corresponding country would extradite its citizens as well.  In 2003, the United States and the European Union entered into an extradition agreement.  The articles of the U.S.-E.U. agreement were incorporated into the pre-existing bilateral treaty to create a new bilateral treaty with Cyprus, signed in 2006.

A five-count indictment filed in the Northern District of Georgia charges Epifaniou with conspiracy to commit wire fraud, wire fraud, conspiracy to commit computer fraud and identity theft, and extortion related to a protected computer. According to the indictment, between approximately October 2014 and November 2016, Epifaniou worked with coconspirators to steal personal identifying information from user and customer databases at victim websites in order to extort the websites into paying ransoms under threat of public disclosure of the sensitive data.  The indictment alleges that Epifaniou obtained confidential personal identifying information from these websites including from a free online game publisher based in Irvine, California; a hardware company based in New York, New York; an online employment website headquartered in Innsbrook, Virginia; and an online sports news website owned by Turner Broadcasting System Inc. in Atlanta, Georgia, either by directly exploiting a security vulnerability at the websites and stealing user and customer data, or by obtaining a portion of the victim website’s user data from a co-conspirator who had hacked into the victim network.  After obtaining the personal identifying information, Epifaniou allegedly used proxy servers located in foreign countries to log into online email accounts and send messages to the victim websites threatening to leak the sensitive data unless a ransom was paid.  He is alleged to have defrauded the entities of $56,850 in bitcoin, and two victims incurred losses of over $530,000 from remediation costs associated with the incident.

Epifanou is scheduled for his arraignment on Monday, July 20, before U.S. Magistrate Judge Alan J. Baverman in the Northern District of Georgia.

Epifaniou is charged in the District of Arizona in a 24-count indictment with conspiracy to commit computer hacking, obtaining information from a protected computer, intentional damage to a protected computer, and threatening to damage a protected computer.

The indictment alleges that on Oct. 30, 2016, Epifaniou obtained unauthorized access to the database of Ripoff Report (ROR), a company located in Phoenix, Arizona, through a brute force attack.  A brute force attack is a trial-and-error method used to obtain information, such as a user password or personal identification number.  Epifaniou allegedly used the attack to successfully override ROR’s login and password protection to access its database through an existing account for a ROR employee.  On Nov. 18, 2016, Epifaniou emailed ROR’s CEO using an email address, threatening to publicly disseminate stolen ROR data unless the company paid him $90,000 within 48 hours.  According to the indictment, Epifaniou emailed again the following day with a hyperlink to a video recording demonstrating Epifaniou’s unauthorized access to the ROR CEO’s account.  The indictment additionally alleges that between October 2016 and May 2017, Epifaniou worked with an associate at “SEO Company,” which was a search engine marketing company based in Glendale, California, to identify companies that might be interested in paying for removal of complaints posted on ROR’s website, which Epifaniou would then illegally remove through unauthorized access to the ROR database.  Epifaniou and his co-conspirator removed at least 100 complaints from the ROR database, charging SEO Company’s “clients” approximately $3,000 to $5,000 for removal of each complaint.

The charges contained in the indictment are merely accusations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

The Diab case was investigated by DEA’s Miami Field Division and Special Operations Division.  Assistant State Attorney Adam C. Korn, Executive Director of the South Florida Financial Crimes Strike Force of the Miami-Dade State Attorney Katherine Fernandez Rundle Office is prosecuting the case.  The Epifaniou case was investigated by the FBI Atlanta and Phoenix Field Offices.  Assistant U.S. Attorney Nathan Kitchens of the Northern District of Georgia is handling the prosecution in that District and Assistant U.S. Attorneys James Knapp and Andrew Stone are handling the prosecution in the District of Arizona.   

The Justice Department extends its gratitude to the government of Cyprus for making the extraditions possible.  The Criminal Division’s Office of International Affairs provided significant assistance in securing the defendants’ extradition from Cyprus.  The U.S. Marshals Service assisted in bringing them back to the United States.

July 23, 2020 in AML | Permalink | Comments (0)

Wednesday, July 22, 2020

Essentra Fze Admits to North Korean Sanctions and Fraud Violations, Agrees to Pay Fine

Essentra FZE Company Limited (Essentra FZE), a global supplier of cigarette products that is incorporated in the United Arab Emirates (UAE), has agreed to pay a $665,112 fine and enter into a deferred prosecution agreement with the Justice Department for conspiring to violate the International Emergency Economic Powers Act (IEEPA) and defrauding the United States in connection with evading sanctions on North Korea. Download Deferred Prosecution Agreement

Today’s public filing against Essentra FZE is the first ever Department of Justice corporate enforcement action for violations of these regulations.  Essentra FZE has also entered into a settlement agreement with the Treasury Department’s Office of Foreign Assets Control (OFAC).

Assistant Attorney General John C. Demers for the Justice Department’s National Security Division, Acting U.S. Attorney Michael R. Sherwin of the District of Columbia, and Special Agent in Charge Jennifer C. Boone of the FBI’s Baltimore Field Office made the announcement.

In entering the deferred prosecution agreement, Essentra FZE admitted and accepted responsibility for its criminal conduct and to pay a fine.  Essentra FZE also agreed to implement rigorous internal controls and to cooperate fully with the Justice Department, including by reporting any criminal conduct by an employee.

“The sanctions the United States has imposed on the North Korean regime are of the utmost importance to the national security of our nation, and the enforcement of U.S. sanctions and related financial criminal laws is a major priority of the National Security Division” said Assistant Attorney General for National Security John C. Demers.  “Essentra FZE devised a criminal scheme to use a deceitful web of front companies and financial entities to manipulate U.S. banks into processing prohibited U.S. dollar transactions for the benefit of North Korea.  The company has now committed to working with our prosecutors to bring those individuals responsible for these acts to justice.”

“Essentra FZE undermined the integrity of our financial system and harmed our national security by deliberately providing North Korea with coveted access to the U.S. economy,” said Acting U.S. Attorney Sherwin.  “Foreign companies transacting through the U.S. financial system or overseas branches of U.S. banks must comply with U.S. sanctions or else face punishment.”

“This is an important case as it demonstrates the FBI will not hesitate to hold businesses accountable for violating sanctions involving North Korea,” said Alan E. Kohler Jr, Assistant Director of the FBI's Counterintelligence Division.   “We will aggressively go after enterprises using front companies, false documents, or other illegal methods to evade sanctions. We want North Korea and private industry to know that efforts to dodge our laws will never be tolerated as business as usual.”

 “Today’s agreement shows that attempts to skirt U.S. sanctions, no matter how complicated the trail or how complex the scheme, will be discovered and met with serious consequences,” said Jennifer Boone, Special Agent in Charge of the FBI’s Baltimore Division.  “I want to thank the FBI team.  This result is a testament to their hard work.” 

U.S. sanctions prevented correspondent banks in the United States and overseas branches of U.S. banks from processing wire transfers on behalf of customers located in North Korea.  According to admissions and court documents, beginning in at least October 2017 and continuing until at least December 2018, Essentra FZE deceived banks in the U.S. and in the U.A.E. into processing transactions for a North Korean tobacco company.  Essentra FZE and its co-conspirators utilized financial cutouts and front companies to conceal the North Korean nexus, as well as falsified shipping records.

Assuming Essentra FZE’s continued compliance with the deferred prosecution agreement, the government has agreed to defer prosecution for a period of three years, after which time, the government would seek to dismiss the charges.

July 22, 2020 in AML | Permalink | Comments (0)

Tuesday, July 21, 2020

Teleworking is Not Working for the Poor, the Young, and the Women

By Mariya BrussevichEra Dabla-Norris, and Salma Khalid

The COVID-19 pandemic is devastating labor markets across the world. Tens of millions of workers lost their jobs, millions more out of the labor force altogether, and many occupations face an uncertain future. Social distancing measures threaten jobs requiring physical presence at the workplace or face-to-face interactions. Those unable to work remotely, unless deemed essential, face a significantly higher risk of reductions in hours or pay, temporary furloughs, or permanent layoffs. What types of jobs and workers are most at risk? Not surprisingly, the costs have fallen most heavily on those who are least able to bear them: the poor and the young in the lowest-paid jobs.

In a new paper Who will Bear the Brunt of Lockdown Policies? Evidence from Tele-workability Measures Across Countries, we investigate the feasibility to work from home in a large sample of advanced and emerging market economies. We estimate that nearly 100 million workers in 35 advanced and emerging countries (out of 189 IMF members) could be at high risk because they are unable to do their jobs remotely. This is equivalent to 15 percent of their workforce, on average. But there are important differences across countries and workers.

Summary: Lockdowns imposed around the world to contain the spread of the COVID-19 pandemic are having a differential impact on economic activity and jobs. This paper presents a new index of the feasibility to work from home to investigate what types of jobs are most at risk. We estimate that over 97.3 million workers, equivalent to about 15 percent of the workforce, are at high risk of layoffs and furlough across the 35 advanced and emerging countries in our sample. Workers least likely to work remotely tend to be young, without a college education, working for non-standard contracts, employed in smaller firms, and those at the bottom of the earnings distribution, suggesting that the pandemic could exacerbate inequality. Crosscountry heterogeneity in the ability to work remotely reflects differential access to and use of technology, sectoral mix, and labor market selection. Policies should account for demographic and distributional considerations both during the crisis and in its aftermath.

Series: Working Paper No. 20/88

The nature of jobs in each country

Most studies measuring the feasibility of working from home follow job definitions used in the United States. But the same occupations in other countries may differ in the face-to-face interactions required, the technology intensity of the production process, or even access to digital infrastructure. To reflect that, the work-from-home feasibility index that we built uses the tasks actually performed within each country, according to surveys compiled by the OECD for 35 countries.

We found significant differences across countries even for the same occupations. It is much easier to telework in Norway and Singapore than in Turkey, Chile, Mexico, Ecuador, and Peru, simply because more than half the households in most emerging and developing countries don’t even have a computer at home.

How to protect the most vulnerable?

The pandemic is likely to change how work is done in many sectors. Consumers may rely more on e-commerce, to the detriment of retail jobs; and may order more takeout, reducing the labor market for restaurant workers.

What can governments do? They can focus on assisting the affected workers and their families by broadening social insurance and safety nets to cushion against income and employment loss. Wage subsidies and public-works programs can help them regain their livelihoods during the recovery.

To reduce inequality and give people better prospects, governments need to strengthen education and training to better prepare workers for the jobs of the future. Lifelong learning also means bolstering access to schooling and skills training to help workers displaced by economic shocks like COVID-19.

This crisis has clearly shown that being able to get online was a crucial determinant to people’s ability to continue engaging in the workplace. Investing in digital infrastructure and closing the digital divide will allow disadvantaged groups to participate meaningfully in the future economy.

Tamu-blog-2Texas A&M University School of Law has launched its online wealth management, risk management, and international tax risk management graduate curricula for industry professionals.

Apply now for fall courses that begin in August: Enterprise Risk Analytics; Information Security Risk Management; Terrorism Risk Management; International Tax Risk Management, Data, and Analytics II; International Tax & Tax Treaties I and II; Securities Regulation; Investment & Portfolio Management; Financial Innovation (and Risk)

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July 21, 2020 in Economics | Permalink | Comments (0)

Monday, July 20, 2020

J5 reflects on two-years pursuing global tax cheats

Leaders from five international tax organizations are marking the two-year anniversary of the formation of the Joint Chiefs of Global Tax Enforcement (J5) this week.

The J5 includes the Australian Taxation Office (ATO, the Canadian Revenue Agency (CRA), the Dutch Fiscal Information and Investigation Service (FIOD), Her Majesty's Revenue and Customs (HMRC) from the UK and the Internal Revenue Service Criminal Investigation Division (IRS-CI) from the US.

Taking advantage of each country's strengths, the J5's initial focus was on enablers of tax crime, virtual currency and platforms that enable each country to share information in a more efficient manner. Within the framework of each country's laws, J5 countries shared information and were able to open new cases, more completely develop existing cases, and find efficiencies to reduce the time it takes to work cases. Operational results have always been the goal of the organization and they have started to materialize.

"While operational results matter, I've been most excited at the other benefits that this group's existence has provided," said Don Fort, Chief, IRS Criminal Investigation. "In speaking with law enforcement partners domestically and abroad as well as stakeholders in various public and private tax organizations, there is real support for this organization and tangible results we have all seen due to the cooperation and global leadership of the J5."

During the two years since the J5's inception, hundreds of data exchanges between J5 partner agencies have occurred with more data being exchanged in the past year than the previous 10 years combined. Each J5 country brings different strengths and skillsets to the J5 and leveraging those skills and capabilities enhance the effectiveness and success of the J5.

Experts from the J5 countries have seen indications that tax offenders are embracing ever more complex methods to conceal their wrongdoings, creating multiple mechanisms and structures that are split across jurisdictions, taking advantage of those areas that offer secrecy and regulatory benefits. With this information, the J5 finds itself continuously adapting to the latest criminal methods and changing behaviors to prioritize the collective operational activity to tackle this dynamic threat picture.

Since the inception of the organization, two J5 countries have hosted events known as "Challenges" aimed at developing operational collaboration. FIOD hosted the first J5 "Challenge" in Utrecht in 2018 and brought together leading data scientists, technology experts and investigators from all J5 countries in a coordinated push to track down those who make a living out of facilitating and enabling international tax crime. The event identified, developed, and tested tools, platforms, techniques, and methods that contribute to the mission of the J5 focusing on identifying professional enablers facilitating offshore tax fraud. The following year, the U.S. hosted a second "Challenge" in Los Angeles and brought together investigators, cryptocurrency experts and data scientists in a coordinated push to track down individuals perpetrating tax crimes around the world.

Last week, a Romanian man was arrested in Germany and admitted to conspiring to engage in wire fraud and offering and selling unregistered securities in connection with his role in the BitClub Network, a cryptocurrency mining scheme worth at least $722 million. This plea was the first for a case under the J5 umbrella and stemmed from collaboration with the Netherlands during the "Challenge" in Los Angeles in 2019.

"The value of the Challenges cannot be overstated," said Fort. "When you take some of the smartest people from each organization and put them in a room for a few days, the results are truly impressive. Each country found investigative leads and was able to further cases utilizing tools and techniques created by each country's experts specifically for the Challenge. I see us doing more of these events in the future."

Last year, the United States and the World Bank hosted cyber training in Washington, DC bringing together more than 120 international and domestic law enforcement partners from approximately 20 countries to address emerging areas associated with cybercrime, virtual currency, blockchain and the dark web. Additionally, to ensure J5 countries were using all law enforcement and legal tools available during their collaborative work, trainings were held in Sydney and the Netherlands on international elements of the UK corporate criminal offense legislation and prosecution opportunities to lawyers and public prosecutors.

After two years of collaboration, data sharing and accelerated casework, the J5 began seeing operational results in early 2020. J5 countries participated in a globally coordinated day of action to put a stop to the suspected facilitation of offshore tax evasion. The action was part of a series of investigations in multiple countries into an international financial institution located in Central America, whose products and services are believed to be facilitating money laundering and tax evasion for customers across the globe. Evidence, intelligence and information collection activities such as search warrants, interviews and subpoenas were undertaken in each country and significant information was obtained and shared as a result. That investigation is ongoing.

"To see each country participate in a coordinated enforcement action all over the world at the same time with the same goal in mind was a real watershed moment for this organization," said Fort. "And that was just the beginning. With dozens of cases in our collective pipelines, I'm excited to see what the next year brings in terms of operational results."

In addition to the group's work with enablers and virtual currency, the J5 also focused on platforms that enable each country to share information in a more organized manner. FCInet is one such platform that each country has invested in to further that goal. FCInet is a decentralized virtual computer network that enables agencies to compare, analyze and exchange data anonymously. It helps users to obtain the right information in real-time and enables agencies from different jurisdictions to work together while respecting each other's local autonomy. Organizations can jointly connect information, without needing to surrender data or control to a central database. FCInet doesn't collect data, rather it connects data.

The J5 was formed in 2018 after a call to arms from the OECD Taskforce on Tax Crime and has been working together to gather information, share intelligence and conduct coordinated operations, making significant progress in each country's fight against transnational tax crime.

For more information about J5, please visit

July 20, 2020 in Tax Compliance | Permalink | Comments (0)

Sunday, July 19, 2020

Distributed Denials of Secrets Takes Over Where Wikileaks Left Off

We are a small group, but our reach expands far beyond just our members. Our founders had informally worked together for many years and developed deep connections in the field of data gathering, research, journalism, activism and technology. In 2018, The Architect, Emma Best and others decided to pool together our expertise and time to create a unified project representing our shared goals, and provide a platform for others to know and trust. Since then, we’ve grown by leaps and bounds. See website here


Added Equifax to Corporations


Added BlueLeaks to North America























  • Initial clearnet website release.
  • Initial clearnet data server release.
  • Added Advisory Board information to About.
  • Updated FAQ.



  • Added Syrian Censorship logs to MENA




  • Added Pfeiffer Nuclear Weapon and National Security Archive to Researchers









  • Further reorganization to provide easier searching.
  • Several items moved to State Sponsored.





  • Major category reorganization to provide easier searching per region.



  • Added Russian Defence Exports ROSOBORONEXPORT (Magnet) to Asia/Russia
  • Added WtSpy (available on request) to Misc.


  • Added Tumblr and Heritage Foundation Emails (Magnet) to Misc.



  • Added CIA code from Schulte’s GitHub (Magnet) to Misc.



  • Added Phoenix Program interviews (Magnet) to Researchers.
  • Added the Wanted page with initial data.


  • Added Researchers section to our available data categories
  • Added Drug War Genesis Interviews (Magnet) to Researchers.
  • Added Documents from US Espionage Den (Magnet) to Misc.
  • Added Guccifer 2.0’s “Clinton Foundation” (Magnet) and “NGP VAN” (Magnet) to State Sponsored - see the note from the editor for warnings about the claims made for this data.
  • Added category descriptions to the data index page.


  • Initial website release.

July 19, 2020 in AML | Permalink | Comments (0)

Saturday, July 18, 2020

DOJ Antitrust Division to Host Virtual Workshop July 28-29 on Competition in the Licensing of Public Performance Rights in the Music Industry

The Department of Justice will hold a virtual public workshop on July 28th and 29th, 2020, to discuss competition in the licensing of public performance rights in the music industry.  The workshop will provide a further venue for industry stakeholders to weigh in on the American Society of Composers, Authors, and Publishers (ASCAP) and Broadcast Music, Inc. (BMI) consent decrees and their implications for antitrust law enforcement and policy as we enter the third decade of the 21st Century and as music distribution continues to evolve through technological innovation. 

A series of panels will discuss competition issues relating to the various types of public performance licenses currently offered in the marketplace, competition between performing rights organizations (PROs), such as ASCAP, BMI and GMR, and the licensing of music to end-users. Panelists will discuss whether or not certain terms of the ASCAP and BMI consent decrees should be modified, and whether the decrees are inhibiting innovative business models that may hurt consumers or artists. These panels will include executives PROs, songwriters, music publishers, music licenses, legal and economic experts, and other industry stakeholders.

The Department of Justice invited public comments from the public on these topics on June 5, 2019 and the comments can be found here. Interested parties may submit any further non-duplicative comments online now through July 22, 2020, at

The workshop is free and open to the public and will be webcast from approximately 12:30 pm – 4 pm Eastern Time each day. A recording of the workshop will be available on the Division’s website.  Registration information, an agenda, instructions on accessing the webcast, and a list of speakers will be available in the near future on the event webpage. Members of the press should email to register.

Reasonable accommodations for people with disabilities are available upon request. If you need such an accommodation, please contact the Antitrust Division at Such requests should include a detailed description of the accommodations needed and a way to contact you if we need more information.

American Society of Composers, Authors and Publishers/Broadcast Music, Inc.

Related Documents:

Related Pages:


As part of its review, the Department invited interested persons, including songwriters, publishers, licensees, and other industry stakeholders, to provide the Division with information or comments relevant to whether the Consent Decrees continue to protect competition. The period for public comment ended August 9, 2019. 

Comments PC-001 to PC-100
Comments PC-101 to PC-200
Comments PC-201 to PC-300
Comments PC-301 to PC-400
Comments PC-401 to PC-500
Comments PC-501 to PC-600
Comments PC-601 to PC-700
Comments PC-701 to PC-800
Comments PC-801 to PC-878

July 18, 2020 in Education | Permalink | Comments (0)

Friday, July 17, 2020

World Wealth Report 2020: 20 million high net wealth persons hold US$74.0 trillion

Capgemini's research based on 2019 and the first quarter of 2020 found that the wealth management industry is in the midst of great disruption as economic forces, competition from new entrants, and client expectations mount. Wealth management executives consider natural events – such as floods and pandemics – to be the number-one industry disruptor, with almost 60% rating it as high impact. Other high-impact disruptors included changing client expectations and a global economic slowdown.

The population of high net wealth individuals grew to 19.6 million persons world wide, holding US$74.0 trillion (Read the World Wealth Report 2020 here)

An analysis of the wealth management client journey revealed that firms are lagging behind in delivering personalized information and services. HNW clients are least satisfied with receiving personalized information or services during acquisition, advisory, and value-added services. This is especially concerning as these touchpoints were also found to be the most vulnerable to BigTech firms – high net worth individuals expect BigTechs to perform better than wealth management firms at these touchpoints.

Wealth management firms can mitigate BigTech incursion by boosting the wow factor at information-related touchpoints

Texas A&M University School of Law has launched its online wealth management, risk management, and international tax risk management graduate curricula for industry professionals.

Apply now for fall courses that begin August 24 on Zoom: Estate, Insurance & Annuity Planning; Financial Innovation (Derivatives and Commodities); Investment & Portfolio Management; Securities Regulation; Enterprise Risk Analytics; Information Security Risk Management; Terrorism Risk Management; International Tax Risk Management, Data, and Analytics II; International Tax & Tax Treaties I and II; among other courses...

Texas A&M University is a public university, ranked in the top 20 public universities by the Wall Street Journal / Times Higher Education university rankings, and is ranked 1st among public universities for its superior education at an affordable cost (Fiske, 2018) and ranked 1st of Texas public universities for best value (Money, 2018).

July 17, 2020 in Wealth | Permalink | Comments (0)

Oman deposits its instrument of ratification for the Multilateral BEPS Convention

Oman deposited its instrument of ratification for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (Multilateral Convention or MLI) with the OECD’s Secretary-General, Angel Gurría, thus underlining its strong commitment to prevent the abuse of tax treaties and base erosion and profit shifting (BEPS) by multinational enterprises. For Oman, the MLI will enter into force on 1 November 2020.

With 94 jurisdictions currently covered by the MLI, today’s ratification by Oman now brings to 49 the number of jurisdictions which have ratified, accepted or approved it.

The text of the Multilateral Convention, the explanatory statement, background information, database, and positions of each signatory are available at

Texas A&M International Tax Risk Management programTexas A&M University School of Law has launched its online international tax risk management graduate curricula for industry professionals.

Apply now for courses that begin August 23: International Tax Risk Management, Data, and Analytics; International Tax & Tax Treaties (complete list here


July 17, 2020 in BEPS, OECD | Permalink | Comments (0)

Thursday, July 16, 2020

San Diego, California Man Sentenced To Federal Prison For His Role In Million Dollar Scheme Targeting Thousands Of U.S. Servicemembers And Veterans

A federal judge in San Antonio sentenced 32-year-old Trorice Crawford of San Diego, California, to 46 months in federal prison for his role in an identity-theft and fraud scheme that victimized thousands of U.S. servicemembers and veterans, the Department of Justice announced today.

In addition to the prison term, Chief U.S. District Judge Orlando Garcia ordered that Crawford pay $103,700 in restitution and be placed on supervised release for a period of three years after completing his prison term.

On December 5, 2019, Crawford pleaded guilty to one count of conspiracy to launder monetary instruments.  By pleading guilty, Crawford admitted that from May 2017 to July 2019, he conspired with Robert Wayne Boling, Jr. (a U.S. citizen), and others to steal money belonging to U.S. Servicemembers and veterans.  By pleading guilty, Crawford admitted to recruiting at least 30 individuals (aka “money mules”) who provided their bank account information to receive funds stolen from military affiliated individuals.  On average, each unauthorized transfer from a victim’s accounts ranged from between $8,000 to $13,000.  Crawford kept a percentage of the withdrawn funds for himself and oversaw the transmission of the remaining amounts by means of international money remittance services to Boling and others in the Philippines.

“The Department of Justice will not tolerate fraud on America’s warfighters and veterans,” said Acting Assistant Attorney General Ethan P. Davis of the Department’s Civil Division.  “Working with our partners and using all tools available, we are committed to protecting those who protect us.”

In October, Crawford’s co-defendant Frederick Brown, age 38 of Las Vegas, NV, pleaded guilty to federal charges in connection with this scheme.  Brown, a former civilian medical records administrator for the U.S. Army at the 65th Medical Brigade, Yongsan Garrison, South Korea, admitted that while logged into the Armed Forces Health Longitudinal Technology Application, he illegally captured on his cell phone personal identifying information (PII) of thousands of military members, including names, social security numbers, DOD ID numbers, dates of birth, and contact information.  Brown further admitted that he subsequently provided that stolen data to Boling so that Boling and others could exploit the information in various ways to access Department of Defense and Veterans Affairs benefits sites and steal millions of dollars. 

As asserted in the federal grand jury indictment, Boling, together with his Philippines-based co-defendants Allan Albert Kerr (Australian citizen) and Jongmin Seok (South Korean citizen), specifically used the stolen information to compromise a Department of Defense portal designed to enable military members to access benefits information online. Once through the portal, the defendants are alleged to have accessed benefits information.  Access to these detailed records enabled the defendants to steal or attempt to steal millions of dollars from military members’ bank accounts. The defendants also stole veterans’ benefits payments. Evidence of the defendants’ scheme was detected earlier this year, advancing the investigation that led to the indictment.

The Departments of Defense and Veterans Affairs are coordinating with the Department of Justice to notify and provide resources to the thousands of identified victims.

Boling, Kerr, and Seok are charged with multiple counts of conspiracy, wire fraud, and aggravated identity theft.  Boling, Kerr, and Seok remain in the Philippines.  Measures are being taken to effect their transfer to the Western District of Texas.  Brown remains in federal custody awaiting sentencing scheduled for 10:30 am on September 17, 2020, before Judge Garcia in San Antonio. 

It is important to note that an indictment merely alleges that crimes have been committed. All defendants are presumed innocent until proven guilty beyond a reasonable doubt.

The United States is represented by Trial Attorneys Ehren Reynolds and Yolanda McCray Jones of the Department of Justice Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Joseph Blackwell of the U.S. Attorney’s Office for the Western District of Texas. The matter was investigated by agents of the Defense Criminal Investigative Service, and counsel Matthew Freund, along with substantial investigative support from the U.S. Postal Inspection Service, the U.S. Army Criminal Investigation Command, and the Veterans Benefits Administration’s Benefits Protection and Remediation Division. The U.S. Department of State’s Diplomatic Security Service, Philippine law enforcement partners, and the U.S. Attorneys’ Offices for the District of Nevada, the Southern District of California, and the Eastern District of Virginia also provided assistance. Resources from the Department of Justice’s Servicemembers and Veterans Initiative and its Transnational Elder Fraud Strike Force aided in the matter’s investigation and prosecution.

Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors.  In particular, in March 2020, the department announced the largest elder fraud enforcement action in American history, charging more than 400 defendants in a nationwide elder fraud sweep.  The department has likewise conducted hundreds of training's and outreach sessions across the country since the passage of the Act.

July 16, 2020 in AML | Permalink | Comments (0)

Wednesday, July 15, 2020

Ireland and Apple Win State Aid Case!

Scroll down to paragraph 241-245 for the application of arm's length to the Irish branches, paras 255-309, and then paragraph 322 for the analysis of the application of the TNMM transfer pricing method - The most relevant parts excerpted from the EU General Court's decision are on my WordPress blog here

(ii) Whether the Commission correctly applied the Authorised OECD Approach in its primary line of reasoning

241    Ireland and ASI and AOE submit, in essence, that the Commission’s primary line of reasoning is inconsistent with the Authorised OECD Approach, inasmuch as the Commission considered that the profits relating to the Apple Group’s IP licences should necessarily have been allocated to the Irish branches of ASI and AOE, in so far as the executives of ASI and AOE did not perform active or critical functions with regard to the management of those licences.

242    In that regard, it should be borne in mind that, in accordance with the Authorised OECD Approach..., the aim of the analysis in the first step is to identify the assets, functions and risks that must be allocated to the permanent establishment of a company on the basis of the activities actually performed by that company. It is true that the analysis in that first step cannot be carried out in an abstract manner that ignores the activities and functions performed within the company as a whole. However, the fact that the Authorised OECD Approach requires an analysis of the functions actually performed within the permanent establishment is at odds with the approach adopted by the Commission consisting, first, in identifying the functions performed by the company as a whole without conducting a more detailed analysis of the functions actually performed by the branches and, second, in presuming that the functions had been performed by the permanent establishment when those functions could not be allocated to the head office of the company itself.

243    In its primary line of reasoning the Commission considered, in essence, that the profits of ASI and AOE relating to the Apple Group’s IP (which, according to the Commission’s line of argument, represented a very significant part of the total profit of those two companies) had to be allocated to the Irish branches in so far as ASI and AOE had no employees capable of managing that IP outside those branches, without, however, establishing that the Irish branches had performed those management functions.

244    Accordingly, as Ireland and ASI and AOE rightly argue, the approach followed by the Commission in its primary line of reasoning is inconsistent with the Authorised OECD Approach.

245    In those circumstances, as is rightly argued by Ireland and ASI and AOE ..., it must be found that the Commission erred in its application, in its primary line of reasoning, of the functional and factual analysis of the activities performed by the branches of ASI and AOE, on which the application of section 25 of the TCA 97 by the Irish tax authorities is based and which corresponds, in essence, to the analysis provided for by the Authorised OECD Approach.

(1)    Strategic decision-making within the Apple Group

298    Ireland and ASI and AOE claim that the ‘centre of gravity’ of the Apple Group’s activities was in Cupertino and not in Ireland. All strategic decisions, in particular those concerning the design and development of the Apple Group’s products, were taken, in accordance with an overall business strategy covering the group as a whole, in Cupertino. That centrally decided strategy was implemented by the companies of the group, which include ASI and AOE, which acted through their management bodies, much like any other company, according to the rules of company law applicable to them.

299    In that regard, it should be noted, in particular, that ASI and AOE submitted evidence, in the administrative procedure and in support of their pleadings in the present instance, on the centralised nature of the strategic decisions within the Apple Group taken by directors in Cupertino and then implemented subsequently by the various entities of the group, such as ASI and AOE. Those centralised procedures concern, inter alia, pricing, accounting decisions, financing and treasury and cover all of the international activities of the Apple Group that would have been decided centrally under the direction of the parent company, Apple Inc.

300    More specifically, with regard to decisions in the field of R&D — which is, in particular, the functional area behind the Apple Group’s IP — ASI and AOE provided evidence showing that decisions relating to the development of the products which were then to be marketed by, inter alia, ASI and AOE, and concerning the R&D strategy which was to be followed by, inter alia, ASI and AOE had been taken and implemented by executives of the group based in Cupertino. It is also apparent from that evidence that the strategies relating to new product launches and, in particular, the organisation of distribution on the European markets in the months leading up to the proposed launch date had been managed at the Apple-Group level by, inter alia, the Executive Team under the direction of the Chief Executive Officer in Cupertino.

301    In addition, it is apparent from the file that contracts with third-party original equipment manufacturers (‘OEMs’), which were responsible for the manufacture of a large proportion of the products sold by ASI, were negotiated and signed by the parent company, Apple Inc., and ASI through their respective directors, either directly or by power of attorney. ASI and AOE also submitted evidence regarding the negotiations and the signing of contracts with customers, such as telecommunications operators, which were responsible for a significant proportion of the retail sales of Apple-branded products, in particular mobile phones. It is apparent from that evidence that the negotiations in question were led by directors of the Apple Group and that the contracts were signed on behalf of the Apple Group by Apple Inc. and ASI through their respective directors, either directly or by power of attorney.

302    Consequently, in so far as it has been established that the strategic decisions — in particular those concerning the development of the Apple Group’s products underlying the Apple Group’s IP — were taken in Cupertino on behalf of the Apple Group as a whole, the Commission erred when it concluded that the Apple Group’s IP was necessarily managed by the Irish branches of ASI and AOE, which held the licences for that IP.

(2)    Decision-making by ASI and AOE

303    With regard to ASI and AOE’s ability to take decisions concerning their essential functions through their management bodies, the Commission itself accepted that those companies had boards of directors which held regular meetings during the relevant period, and reproduced extracts from the minutes of those meetings confirming that fact in Tables 4 and 5 of the contested decision.

304    The fact that the minutes of the board meetings do not give details of the decisions concerning the management of the Apple Group’s IP licences, of the cost-sharing agreement and of important business decisions does not mean that those decisions were not taken.

305    The summary nature of the extracts from the minutes reproduced by the Commission in Tables 4 and 5 of the contested decision is sufficient to allow the reader to understand how the company’s key decisions in each tax year, such as approval of the annual accounts, were taken and recorded in the relevant board minutes.

306    The resolutions of the boards of directors which were recorded in those minutes covered regularly (that is to say, several times a year), inter alia, the payment of dividends, the approval of directors’ reports and the appointment and resignation of directors. In addition, less frequently, those resolutions concerned the establishment of subsidiaries and powers of attorney authorising certain directors to carry out various activities such as managing bank accounts, overseeing relations with governments and public bodies, carrying out audits, taking out insurance, hiring, purchasing and selling assets, taking delivery of goods and dealing with commercial contracts. Moreover, it is apparent from those minutes that individual directors were granted very wide managerial powers.

307    In addition, with regard to the cost-sharing agreement, it is apparent from the information submitted by ASI and AOE that the various versions of that agreement in existence during the relevant period were signed by members of the respective boards of directors of those companies in Cupertino.

308    Moreover, according to the detailed information provided by ASI and AOE, it is the case for both ASI and AOE that, among ASI’s 14 directors and AOE’s 8 directors on their respective boards for each tax year during the period when the contested tax rulings were in force, there was only one director who was based in Ireland.

309    Consequently, the Commission erred when it considered that ASI and AOE, through their management bodies, in particular their boards of directors, did not have the ability to perform the essential functions of the companies in question by, where appropriate, delegating their powers to individual executives who were not members of the Irish branches’ staff.

(d)    Conclusions concerning the activities within the Apple Group

310    It is apparent from the foregoing considerations that, in the present instance, the Commission has not succeeded in showing that, in the light, first, of the activities and functions actually performed by the Irish branches of ASI and AOE and, second, of the strategic decisions taken and implemented outside of those branches, the Apple Group’s IP licences should have been allocated to those Irish branches when determining the annual chargeable profits of ASI and AOE in Ireland.

The EU General Court of Justice press release described its decision as follows: In 2016 the Commission adopted a decision concerning two tax rulings issued by the Irish tax authorities (Irish Revenue) on 29 January 1991 and 23 May 2007 in favor of Apple Sales International (ASI) and Apple Operations Europe (AOE), which were companies incorporated in Ireland but not tax resident in Ireland. The contested tax rulings endorsed the methods used by ASI and AOE to determine their chargeable profits in Ireland, relating to the trading activity of their respective Irish branches. The 1991 tax ruling remained in force until 2007, when it was replaced by the 2007 tax ruling. The 2007 tax ruling then remained in force until Apple’s new business structure was implemented in Ireland in 2014.

By its decision, the Commission considered that the tax rulings in question constituted State aid unlawfully put into effect by Ireland. The aid was declared incompatible with the internal market. The Commission demanded the recovery of the aid in question. According to the Commission’s calculations, Ireland had granted Apple 13 billion euro in unlawful tax advantages.

By today’s judgment, the General Court annuls the contested decision because the Commission did not succeed in showing to the requisite legal standard that there was an advantage for the purposes of Article 107(1) TFEU. According to the General Court, the Commission was wrong to declare that ASI and AOE had been granted a selective economic advantage and, by extension, State aid.

The General Court endorses the Commission’s assessments relating to normal taxation under the Irish tax law applicable in the present instance, in particular having regard to the tools developed within the OECD, such as the arm’s length principle, in order to check whether the level of chargeable profits endorsed by the Irish tax authorities corresponds to that which would have been obtained under market conditions.

However, the General Court considers that the Commission incorrectly concluded, in its primary line of reasoning, that the Irish tax authorities had granted ASI and AOE an advantage as a result of not having allocated the Apple Group intellectual property licences held by ASI and AOE, and, consequently, all of ASI and AOE’s trading income, obtained from the Apple Group’s sales outside North and South America, to their Irish branches. According to the General Court, the Commission should have shown that that income represented the value of the activities actually carried out by the Irish branches themselves, in view of, inter alia, the activities and functions actually performed by the Irish branches of ASI and AOE, on the one hand, and the strategic decisions taken and implemented outside of those branches, on the other.

In addition, the General Court considers that the Commission did not succeed in demonstrating, in its subsidiary line of reasoning, methodological errors in the contested tax rulings which would have led to a reduction in ASI and AOE’s chargeable profits in Ireland. Although the General Court regrets the incomplete and occasionally inconsistent nature of the contested tax rulings, the defects identified by the Commission are not, in themselves, sufficient to prove the existence of an advantage for the purposes of Article 107(1) TFEU.

Furthermore, the General Court considers that the Commission did not prove, in its alternative line of reasoning, that the contested tax rulings were the result of discretion exercised by the Irish tax authorities and that, accordingly, ASI and AOE had been granted a selective advantage.

Transfer Pricing 4th Ed WIlliam ByrnesThis case will be analyzed and included in William Byrnes' annually update of his 4th Edition of Practical Guide to U.S. Transfer Pricing. The next supplement will contain 50 chapters of 2,000 pages of technical, jurisprudence, and regulatory analysis to advise clients from a tax risk management perspective and to mitigate controversy. Order a copy here: 


[download entire Apple State Aid CJEU decision 15 July 2020


July 15, 2020 in BEPS | Permalink | Comments (0)

Turning complaint into action: The CFPB works for you

Most of us are doing everything we can to stay healthy in the face of this terrible pandemic—staying home, homeschooling the kids, and making facemasks for family and neighbors. These critical efforts necessary to counter the pandemic have also led to massive, and seemingly overnight, economic impact. With so many of our family, friends, and neighbors experiencing loss of income or job loss, it is an unprecedented time, full of uncertainty and therefore stress. If you are experiencing financial hardship during this challenging time, the Consumer Financial Protection Bureau (CFPB) recommends that you reach out to your financial service provider and seek accommodation. Responsible banks, lenders, and creditors are ready to work with you and help you through this period. And they’re the best positioned to provide assistance catered to your circumstances. But please know that if you don’t get a reasonable result from your interaction—if there seems to be a miscommunication, miscalculation, or worse on their end, and you don’t know what to do— Turn to us. See

Despite the changes in operations brought by the pandemic and stay-at-home orders, we are on the job fielding on average 30,000 complaints a month.

Since our founding by Congress after the financial crisis of 10 years ago, the CFPB has a dedicated staff whose sole job it is to hear about issues in the consumer financial marketplace, assemble the details and documents of the complaint, and engage directly with the companies involved until you get an answer.

This is all done in a secure way that protects your information.

We encourage you to engage first with the financial company involved, since they know about your loan or product and should be customer-focused. But sometimes you need to put some more people on your team.

If you feel that you can’t get a reasonable answer, build your case. The best complaints are the ones that explain, clearly and concisely:

  • What happened, including key details and documents
  • What you think would be a fair resolution
  • What you’ve done to try and resolve it

Then go to where you’ll be able to detail the issue and attach relevant documents. We'll forward your complaint and any documents you provide to the company and work to get a response from them. If we find that another government agency would be better able to assist, we will forward your complaint to them and let you know. By submitting online, you’ll also be able to track your status via our secure web-based Consumer Portal.

If you can’t submit online, you can submit a complaint over the phone by calling us at (855) 411-CFPB (2372), toll free, 8 a.m. to 8 p.m. ET, Monday through Friday. Our U.S.-based contact center can help you in over 180 languages and can also take calls from consumers who are deaf, have hearing loss, or have speech disabilities.

After you’ve submitted your complaint you can check its status at or by calling us. We’ll also send you email updates along the way, so you know where you are in the process, and what’s next.

After the company responds to your complaint, we’ll email you, and you can log back in to review the response and provide feedback.

Your complaints give us important insight into the issues you face as a consumer. Complaints provide the Bureau with near real-time information about the types of challenges consumers are experiencing with financial products and services. We use them to inform our efforts in consumer education, create clear rules of the road for companies, and take action against bad actors in the marketplace. The Bureau also shares consumer complaint information with prudential regulators, the Federal Trade Commission, other federal agencies, and state agencies to ensure that the Bureau and other regulators have useful information to support consumers.

Help is here for you. In this time of uncertainty and fear, the more we can protect consumers from innocent mistakes as well as bad actors and fraudsters the healthier our overall financial well-being will be. We are all in this together.

July 15, 2020 in Financial Regulation | Permalink | Comments (0)

Tuesday, July 14, 2020

FTC Takes Action against Marketer That Falsely Promised Consumers Next Day Shipping of Facemasks and Other Personal Protective Equipment

SuperGoodDeals capitalized on soaring demand for protective equipment from consumers worried about being exposed to COVID-19, agency alleges

The Federal Trade Commission charged an online marketer with falsely promising consumers next-day shipping of facemasks and other personal protective equipment (PPE) to deal with the coronavirus pandemic.

In a federal court complaint against, Inc. and its owner, Kevin J. Lipsitz, the FTC alleged the company sought to capitalize on the soaring demand for PPE from consumers worried about being exposed to the coronavirus. Beginning in March, SuperGoodDeals’ website said PPE was “in stock,” and touted “Pay Today, Ships Tomorrow.”

But according to the FTC, it frequently it took weeks for SuperGoodDeals to ship the PPE merchandise customers ordered.  The FTC’s latest Consumer Protection Data Spotlight shows that in April and May, the FTC received more than 34,000 complaints from consumers related to online shopping. More than 18,000 of those complaints related to items that were ordered but never delivered. The most common item reported not delivered was facemasks, with other reports including sanitizer, toilet paper, thermometers, and gloves as not received.

While online shopping complaints to the FTC have been on the rise for a number of years, reports of unreceived items in May 2020 alone represent a nearly two-fold increase over the number of reports in December 2019, the heart of the busy holiday shopping season.

“Unscrupulous merchants are taking advantage of consumers in their hour of need by not delivering goods—including masks and other personal protective equipment—as promised, and failing to provide required refunds,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. “The FTC will not tolerate this, and we are working closely with criminal authorities to put a stop to it.”

The U.S. Attorney’s Office for the Eastern District of New York concurrently brought a criminal case against Mr. Lipsitz alleging that he engaged in price gouging and mail and wire fraud.

Online shopping problems like the ones cited in the FTC’s complaint against SuperGoodDeals are the largest source of coronavirus-related complaints the Commission has received from consumers since the pandemic began, according to figures released by the FTC.

According to the FTC’s complaint, SuperGoodDeals received hundreds of complaints about the shipping delays through emails, phone calls, and website chat messages. Some of the complaints were from customers who were in dire need of PPE, including one customer who ordered disposable masks for child welfare workers making in-home visits; another who ordered masks for a family member who is a nurse; and a third who ordered masks for her immunocompromised mother.

The FTC alleged that SuperGoodDeals’ deceptive tactics violated the FTC Act, and that the company also violated the FTC’s Mail Order Rule, which requires that companies advertising that they can ship merchandise within a certain timeframe have a reasonable basis for the promised timeframe. The Rule also requires that, if companies find they cannot meet the promised timeframe, they must seek the customer’s consent to the delayed shipment, or refund their money. SuperGoodDeals did not notify consumers, seek their consent to delayed shipments, and they did not refund their money.

In addition to its false claims about next-day shipping, the FTC also alleged that some of the other merchandise sold through the SuperGoodDeals’ website, such as Yeti tumbler mug, were falsely advertised as “authentic” or “certified.”

The Commission vote authorizing the staff to file the complaint was 4-0-1, with Commissioner Rebecca Kelly Slaughter not participating. The complaint was filed in the U.S. District Court for the Eastern District of New York.

NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.

July 14, 2020 in Financial Regulation | Permalink | Comments (0)

Monday, July 13, 2020

Two Defendants Charged for Their Role in Bribery and Money Laundering Scheme Involving Former High-Ranking Government Official in Panama

Individuals Facilitated $28 Million in Bribes from Odebrecht S.A. to the Official

A criminal complaint was unsealed today in federal court in Brooklyn, New York, charging Luis Enrique Martinelli Linares (Luis Martinelli Linares) and Ricardo Alberto Martinelli Linares (Ricardo Martinelli Linares) for their roles in a massive bribery and money laundering scheme involving Odebrecht S.A. (Odebrecht), a Brazil-based global construction conglomerate. 

On Dec. 21, 2016, Odebrecht pleaded guilty in the Eastern District of New York to a criminal information charging it with conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA) for its involvement in the bribery and money laundering scheme. 

The overarching Odebrecht scheme involved the payment of more than $700 million in bribes to government officials, public servants, political parties, and others in Panama and other countries around the world to obtain and retain business for the company.  The two individual defendants are alleged to have participated in the scheme by, among other things, serving as intermediaries for approximately $28 million in bribe payments made by and at the direction of Odebrecht to a then high-ranking government official in Panama (Panama Government Official), who was a close relative of the defendants.  Luis Martinelli Linares and Ricardo Martinelli Linares were each charged with one count of conspiracy to commit money laundering.  

Luis Martinelli Linares and Ricardo Martinelli Linares were arrested at el Aeropuerto Internacional la Aurora in Guatemala on July 6 pursuant to a provisional arrest request from the United States.  

As alleged in the complaint, between approximately August 2009 and January 2014, the defendants facilitated the payment of bribes from Odebrecht to or for the benefit of the Panama Government Official by taking a number of steps that included opening and managing secret bank accounts held in the names of shell companies in foreign jurisdictions.  These secret bank accounts were used to receive, transfer, and deliver the bribe payments.  The defendants served as the signatories on certain of the shell company bank accounts, and personally sent and caused to be sent wire transfers through the structure of shell company bank accounts to conceal and spend bribery proceeds.  Many of these financial transactions were in U.S. dollars and were made through U.S. banks, some of which were located in New York.

Download Luis Martinelli Linares and Ricardo Martinelli Linares Complaint

July 13, 2020 in AML | Permalink | Comments (0)

Sunday, July 12, 2020

Enhancing Reputational Risk Management for Tax Administrations

The OECD Forum on Tax Administration (FTA) today released a report on reputational risk management, highlighting its importance for protecting and enhancing tax compliance, including in the COVID-19 environment. The report, led by the Canada Revenue Agency and the FTA's Enterprise Risk Management Community of Interest, sets out the key considerations for developing and improving reputational risk management practices within tax administrations. It also introduces a reputational risk management maturity model, allowing administrations to self-assess their current capabilities and facilitating consideration of how and where improvements might be made. 

"Tax administrations more than ever have to ensure that they have the trust and respect of their taxpayer and stakeholder populations to achieve our objectives, something highlighted by the current crisis," said Bob Hamilton, Commissioner at the Canada Revenue Agency. "The joint work done with other FTA administrations on how to think about, measure and proactively address reputational risk will help to provide confidence and trust during the COVID-19 crisis and recovery, and could have long lasting positive impacts on the relationship between tax administrations and taxpayers."

"In the COVID-19 crisis tax administrations have been playing a central role in supporting taxpayers and the wider economy" said Pascal Saint-Amans, the Director of the OECD Centre for Tax Policy and Administration. "While this may have had positive impacts on the reputation of tax administrations and on compliance attitudes, that can easily change, and potentially dramatically, in such a difficult and fluid environment and therefore requires both careful consideration and active management".

This report highlights the importance of reputational risk management in modern tax administration and sets out some key considerations as to how to identify and manage reputational risks. It also contains a set of tools to assist tax administrations in developing their capacity in this area including a maturity model which allows administrations to self-assess their current capacity and to identify areas for possible further development. The report has been produced by the FTA Enterprise Risk Management Community of Interest (COI). It is the first in an intended series of reports by the FTA's Communities of Interest which bring together experts to exchange views and work collaboratively on major themes of modern tax administration.

This work was led within the Enterprise Risk Management COI by colleagues from the Canada Revenue Agency. As noted in the report, managing reputational risk is hugely important in helping to achieve the objectives of tax administration and wider government, something which is particularly true in times of crisis. The key principles driving reputational risk are trust in the administration and its staff and respect towards the organisation. When an administration consistently abides by its ethical duties, it establishes trust in the eyes of taxpayers and other stakeholders. When it fails to meet the standards expected of it, particularly with respect to the fair and equal treatment of taxpayers, public trust and credibility can be quickly eroded.

Download the report (PDF)

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July 12, 2020 in OECD | Permalink | Comments (0)